Pakistan’s unfortunate issue of brain drain

If intellectual capital continues to flow out, country’s total output will not increase

KARACHI: Brain drain from developing countries towards the developed world is a gift of globalisation. Talent over the course of human history has always had an affinity with economic logic.

This caused philosophers, poets and thinkers to flock around the thrones of ancient monarchs. The trend continues in the modern world wherein the ancient monarchs are replaced by affluent societies.

Over the last weekend, I met two of my friends who live in the US. Both of them are entirely different people with extremely opposite outlooks on life. However, both were completely convinced that American life is substantially better than ours is in Pakistan. One is a big fan of technology, ostentatious liberalism and progress their society has to offer. The other believes living there is far more easy and profitable.



I am in no position to judge both. I just have a few observations to make.

Both friends are smart, intelligent and talent-gems studying in top-ranked universities in the US. And both of them have spent initial years of their lives in Pakistan. This means that to a certain extent this country bore their burden and somehow invested in them in the initial years of their life. But since this country could not generate the econo-magnetic force (economic incentive to keep them glued to it), they left and will unleash all of their intellectual productivity for the US.

Elementary students of labour economics can easily figure out the macroeconomic impact of such brain drain. If such intellectual capital continues to flow out of the country without adequate replenishment, our total output/GDP will not increase as much as it can.

One must also realise that we are now living in the era of knowledge and ideas. Google, Facebook, Amazon and all these tech-giants are big names only because of their people. Human capital is the most important asset and no country can afford to fumble with it.

We, on the other hand, prepare, nourish and train our talent and when they are ripe we lose them to others.

It is not only the case of my above referred friends. Once I was having a discussion with a leading entrepreneur of this country and he said, “All of my school mates are outside Pakistan.”

The decadence that we see around us, the chaos on the roads, and the intellectual blackout; all of this is a consequence of brain drain.

This is not just a bleak situation for the country but for those going out it is a tough road ahead; the best and the brightest flock around in the developed world. According to the law of diminishing marginal utility, the marginal utility of talent in the developed world is much lesser than what we have in Pakistan. We have much to do, which means that there is more room for growth.

Harvard University has predicted that Pakistan will grow at 6% for the next 10 years and this prediction is higher than predictions for most countries of the developed world. According to this logic, the economic return of talent should be higher in Pakistan in years to come.



Another less celebrated aspect of this issue is the loss of happiness due to estranged families. According to a Harvard study, which ranges over 75 years, the strongest causal determinant of a happy life is the quality of relationships. Wealth and possessions-promises of immigration have no statistical correlation with a happy life.

On the other hand, those who are leaving contest a strong case as well. They complain about deterioration in law and order, lack of availability of clean drinking water, rampant corruption and lack of opportunities. One cannot undermine the potency in the above mentioned considerations.

Brain drain is one of the most serious (if not the most serious) concerns for us. Policymakers should provide a conducive environment for intellectual capital to stick around as they are the true engine of progress and growth.

For talent, I must say, nothing beats apparent economic logic and they must see economic incentives in Pakistan so that they decide not to leave.

The writer is a corporate banker and teaches economics

 

Published in The Express Tribune, January 22^nd, 2018.

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